Correlation Between Cenergy Holdings and Tubize Fin

Can any of the company-specific risk be diversified away by investing in both Cenergy Holdings and Tubize Fin at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Cenergy Holdings and Tubize Fin into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cenergy Holdings SA and Tubize Fin, you can compare the effects of market volatilities on Cenergy Holdings and Tubize Fin and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Cenergy Holdings with a short position of Tubize Fin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cenergy Holdings and Tubize Fin.

Diversification Opportunities for Cenergy Holdings and Tubize Fin

-0.42

Correlation Coefficient

Cenergy Holdings  Tubize Fin

Very good diversification

The 3 months correlation between Cenergy and Tubize is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Cenergy Holdings SA and Tubize Fin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tubize Fin and Cenergy Holdings is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Cenergy Holdings SA are associated (or correlated) with Tubize Fin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tubize Fin has no effect on the direction of Cenergy Holdings i.e., Cenergy Holdings and Tubize Fin go up and down completely randomly.

Pair Corralation between Cenergy Holdings and Tubize Fin

Assuming the 90 days trading horizon Cenergy Holdings SA is expected to generate 0.86 times more return on investment than Tubize Fin. However, Cenergy Holdings SA is 1.16 times less risky than Tubize Fin. It trades about 0.12 of its potential returns per unit of risk. Tubize Fin is currently generating about -0.04 per unit of risk. If you would invest  870.00  in Cenergy Holdings SA on September 15, 2024 and sell it today you would earn a total of  43.00  from holding Cenergy Holdings SA or generate 4.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Cenergy Holdings SA  vs.  Tubize Fin

Cenergy Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cenergy Holdings SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, Cenergy Holdings is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Tubize Fin

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Tubize Fin are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable fundamental drivers, Tubize Fin is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Cenergy Holdings and Tubize Fin

The main advantage of trading using opposite Cenergy Holdings and Tubize Fin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cenergy Holdings position performs unexpectedly, Tubize Fin can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Tubize Fin will offset losses from the drop in Tubize Fin's long position.

The idea behind Cenergy Holdings SA and Tubize Fin pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.